ARTICLE 1 - INTERPRETATION
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1.01 |
Definitions
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1.02 |
Headings
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3 | |||||
1.03 |
Extended Meanings
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3 | |||||
1.04 |
Statutory References
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3 | |||||
1.05 |
Currency
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3 | |||||
ARTICLE 2 - PURCHASE AND SALE
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3 | ||||||
2.01 |
Purchase of Shares and Purchased Debt
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2.02 |
Purchase Price and Allocation
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3 | |||||
2.03 |
Satisfaction of Purchase Price
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2.04 |
Closing
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ARTICLE 3 - REPRESENTATIONS AND WARRANTIES | 4 | ||||||
3.01 |
Vendor's Representations and Warranties
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4 | |||||
3.02 |
Purchaser's Representations and Warranties
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7 | |||||
3.03 |
Survival of Representations and Warranties of the Vendor
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7 | |||||
3.04 |
Survival of Representations and Warranties of the Purchaser
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8 | |||||
ARTICLE 4 - CONSENT
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4.01 |
Consent of the Purchaser
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ARTICLE 5 - INDEMNIFICATION
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5.01 |
Definitions
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5.02 |
Indemnification by the Vendor
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9 | |||||
5.03 |
Monetary Limit on Indemnity of Vendor
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5.04 |
Indemnification by the Purchaser
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9 | |||||
5.05 |
Payments
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5.06 |
Rights in Addition
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ARTICLE 6 - GENERAL
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6.01 |
Non-Reliance on Representations and Warranties
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6.02 |
Further Assurances
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6.03 |
Time of the Essence
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6.04 |
Benefit of the Agreement
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11 | |||||
6.05 |
Entire Agreement
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10 | |||||
6.06 |
Amendments and Waiver
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10 | |||||
6.07 |
Notices
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11 | |||||
6.08 |
Governing Law
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11 | |||||
6.09 |
Counterparts
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11 | |||||
6.10 |
Facsimiles
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12 | |||||
6.11 |
No Third Party Beneficiaries
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12 |
1.01
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Definitions
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(i)
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any applicable domestic or foreign law including any statute, subordinate legislation or treaty, and
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(ii)
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any applicable guideline, directive, rule, standard, requirement, policy, order, judgment, injunction, award or decree of a governmental authority having the force of law.
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1.02
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Headings
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1.03
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Extended Meanings
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1.04
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Statutory References
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1.05
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Currency
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All references to currency herein are to lawful money of Canada.
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2.01
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Purchase of Shares and Purchased Debt
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2.02
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Purchase Price and Allocation
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2.03
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Satisfaction of Purchase Price
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2.04
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Closing
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3.01
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Vendor's Representations and Warranties
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(a)
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The Corporation is a corporation duly incorporated, organized and subsisting under the laws of the State of Delaware with the corporate power to own its assets and to carry on its business.
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(b)
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The Vendor has the power, authority and right to enter into and deliver this Agreement and to complete the transactions contemplated to be completed by the Vendor hereunder.
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(c)
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The authorized capital of the Corporation consists only of common shares, of which only the Shares have been duly and validly allotted and issued to the Vendor. All of the Shares are outstanding as fully paid and non-assessable and are registered in the names of and beneficially owned by the Vendor.
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(d)
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No Person has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option (including rights under convertible securities, warrants or convertible obligations of any nature, rights of exchange, plans or other agreement of any character):
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(i)
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for the purchase, subscription, allotment or issuance of any of the unissued shares in the capital of the Corporation or of any other securities of the Corporation; or
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(ii)
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to purchase or otherwise acquire from the Vendor all or any part of the Shares or any interest therein or part thereof.
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(e)
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The Vendor is the beneficial owner of record of the Shares with good and marketable title thereto free and clear of all Charges of any Person of every nature, kind and description whatsoever, save and except for the general security interest granted to the Purchaser pursuant to the Debentures (as defined in the Settlement Agreement). The Vendor has the exclusive right and full power and authority to sell, transfer and deliver good and marketable title to such shares to the Purchaser as herein contemplated, subject only to the Charge set out in the Debentures.
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(f)
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This Agreement has been duly and validly executed and delivered by the Vendor and constitutes, and the documents and instruments to be delivered by the Vendor pursuant hereto at the Closing when executed and delivered will constitute valid and legally binding obligations of the Vendor, enforceable against the Vendor in accordance with their respective terms subject to applicable bankruptcy, insolvency, reorganization and other laws of general application limiting the enforcement of creditors' rights generally and to the fact that specific performance is an equitable remedy available only in the discretion of the court.
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(g)
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The corporate records and minute books of the Corporation are complete and accurate in all material respects and contain complete and accurate copies of all articles of incorporation and articles of amendment pertaining to the Corporation and no applications or filings which would alter in any way the constating documents or corporate status of the Corporation are presently outstanding. All minutes of meetings recorded in the said minute books are complete and accurate in all material respects and all such meetings were duly called, convened and held. The register of shareholders, registers of transfers and the register of directors of the Corporation are complete and accurate in all material respects.
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(h)
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The books of account, ledgers and other financial records of the Corporation have been maintained in accordance with good business practices, are complete and accurate in all material respects and fairly set out and disclose, in all material respects, in accordance with good bookkeeping and proper accounting practices and, where applicable, in accordance with Generally Accepted Accounting Principles, the financial position of the Corporation as at May 31, 2008 and there are no material matters or transactions of the Corporation in respect of which, complete and appropriate entries have not been made or recorded in such books, ledgers and records. No financial information, records or systems pertaining to the operation or administration of the Corporation or its business are in the possession of, recorded, stored, maintained by or otherwise dependent on any other Person.
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(i)
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Except for the Tax return for the fiscal year ended May 31, 2009, the Corporation has filed all federal, state, local and other Tax returns and reports required to be filed by it and has paid all Taxes interest and penalties (if any) shown to be due by such returns or reports. The information contained in such returns and reports was true and correct and properly and accurately reflected all Taxes, interest and penalties (if any) due and payable with respect to the periods covered thereby.
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(j)
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There are no audits, assessments, reassessments, actions, suits, proceedings, investigations or claims pending or, to the best of the knowledge, information and belief of the Vendor, threatened against the Corporation with respect to Taxes or any matter under discussion with any governmental authority relating to Taxes asserted by any such authority. The Corporation has not given or been requested to give waivers of any statute of limitation relating to the payment of any Taxes or relating to the statutory period within which an assessment, reassessment, or other proceeding in respect of prior fiscal periods may be issued by any appropriate authority and there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any report or return by or the payment of any Tax of the Corporation. |
(k)
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The Corporation has withheld from each payment made, or deemed under the US Tax Act to have been made, by it or credited or deemed to have been credited by it, to any Person the amount of all Taxes and all other deductions required to be withheld therefrom and has paid the same to the proper taxing or other authority within the time required under all applicable legislation and regulations.
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(l)
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The Corporation has not, since the date of its incorporation, carried on business in any jurisdiction.
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(m)
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The only transactions to which the Corporation has ever been a party related to: (i) the subscription for units in Zor Pharmaceuticals, LLC ("Zor LLC"); and (ii) a loan from the Vendor pursuant to which it received a principal amount of $2,500.00. All the obligations and liabilities of the Corporation arising out of transaction (i) have been fully performed.
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(n)
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As of the date hereof, the only asset of the Corporation is the shares in Zor LLC which are beneficially owned by the Corporation and, to the knowledge of Lorus as of December 15, 2008, comprise not less than nineteen (19%) percent of all of the issued and outstanding shares of Zor LLC.
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(o)
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The Corporation has never had and does not currently have any employees, nor is the Corporation a party to or otherwise bound by any consulting agreements, service agreements, management agreements or employment contracts.
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(p)
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Neither the entering into nor the delivery of this Agreement nor the completion of the transactions contemplated hereby by the Vendor will result in the violation of:
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(i)
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any of the provisions of the constating documents or by-laws of the Vendor
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or of the Corporation;
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(ii)
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any agreement or other instrument to which the Vendor or the Corporation is a party or by which the Vendor or the Corporation is bound; or
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(iii)
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any Applicable Law in respect of which the Vendor or the Corporation must comply.
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(q)
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The Vendor is not a non-resident person within the meaning of section 116 of the Tax Act.
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(r)
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No suit, action or other legal proceedings of any nature, kind or description whatsoever are pending or, to the knowledge of the Vendor are threatened which would restrain or otherwise prevent, in any manner, the Vendor from effectually and legally transferring good and marketable title to the Shares to the Purchaser hereunder.
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(s)
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No Person is indebted to the Corporation and the Corporation is not indebted to any Person with the exception of $2,500.00 which it owes to the Vendor as repayment of the principal amount of a loan.
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3.02
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Purchaser's Representations and Warranties
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(a)
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The Purchaser is a corporation duly incorporated, organized and subsisting under the laws of Canada with the corporate power to own its assets and to carry on its business.
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(b)
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The Purchaser has the power, authority and right to enter into and deliver this Agreement and to complete the transactions contemplated to be completed by the Purchaser hereunder.
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(c)
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This Agreement has been duly and validly executed and delivered by the Purchaser and constitutes, and the documents and instruments to be delivered by the Purchaser pursuant hereto at the Closing when executed and delivered will constitute valid and legally binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their respective terms subject to applicable bankruptcy, insolvency, reorganization and other laws of general application limiting the enforcement of creditors' rights generally and to the fact that specific performance is an equitable remedy available only in the discretion of the court.
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(d)
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Neither the entering into nor the delivery of this Agreement nor the completion of the transactions contemplated hereby by the Purchaser will result in the violation of:
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(i)
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any of the provisions of the constating documents or by-laws of the
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Purchaser;
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(ii)
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any agreement or other instrument to which the Purchaser is a party or by which the Purchaser is bound; or
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(iii)
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any Applicable Law in respect of which the Purchaser must comply.
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(e)
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The Purchaser represents and warrants that it is an "accredited investor" within the meaning of National Instrument 45-106-Prospectus and Registration Exemptions.
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3.03
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Survival of Representations and Warranties of the Vendor
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3.04
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Survival of Representations and Warranties of the Purchaser
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4.01
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Consent of the Purchaser
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5.01
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Definitions
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(a)
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"Claim" means any demand, action, suit, proceeding, claim, assessment, judgement or settlement or compromise relating thereto which may give rise to a right to indemnification under Sections 5.02 or 5.04;
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(b)
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"Indemnifier" means any party obligated to provide indemnification under this Agreement;
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(c)
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"Indemnified party" means any Person entitled to indemnification under this Agreement; and
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(d)
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"Loss" means any and all loss, liability, damage, cost, expense, charge, fine, penalty or assessment, resulting from or arising out of any Claim, including the costs and expenses of any action, suit, proceeding, demand, assessment, judgement, settlement or compromise relating thereto and all interest, punitive damages, fines and penalties and reasonable legal fees and expenses incurred in connection therewith, including loss of profits and consequential damages.
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5.02
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Indemnification by the Vendor
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(a)
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any misrepresentation or breach of warranty made or given by the Vendor in this Agreement or in any document delivered pursuant to this Agreement; or
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(b)
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any failure by the Vendor to observe or perform any obligation contained in this Agreement or in any document delivered pursuant to this Agreement to be observed or performed by the Vendor.
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5.03
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Monetary Limit on Indemnity of Vendor
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5.04
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Indemnification by the Purchaser
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(a)
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any misrepresentation or breach of any warranty made or given by the Purchaser in this Agreement or in any document delivered pursuant to this Agreement; or
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(b)
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any failure by the Purchaser to observe or perform any obligation contained in this Agreement, in any document delivered pursuant to this Agreement or in any document delivered pursuant to any of them to be observed or performed by it.
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5.05
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Payments
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5.06
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Rights in Addition
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6.01
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Non-Reliance on Representations and Warranties
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6.02
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Further Assurances
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6.03
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Time of the Essence
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6.04
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Benefit of the Agreement
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6.05
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Entire Agreement
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6.06
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Amendments and Waiver
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6.07
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Notices
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6.08
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Governing Law
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6.09
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Counterparts
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6.10
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Facsimiles
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6.11
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No Third Party Beneficiaries
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THE ERIN MILLS INVESTMENT CORPORATION
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Per:
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Per:
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LORUS THERAPEUTICS INC.
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Per:
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Per:
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